Par value stock is capital stock to which the charter has assigned a value per share. Years ago, par value determined the legal capital per share that a company must retain in the business for the protection of corporate creditors; that amount was not available for withdrawal by stockholders. Thus, in the past, most states required the corporation to sell its shares at a par or above.
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- Last-in, First-out (LIFO)
Last-in, First-out (LIFO) method is an inventory costing method that assumes the costs of the latest units purchased are the first to be allocated to cost of goods sold.
- Indirect materials
Indirect materials are those raw materials which cannot be easily associated with the finished product.
- Time period assumption
Time period assumption is a convenient assumption that accountants can divide the economic life of a business into artificial time periods. The time period assumption...
- Research & development costs
Research and development costs are expenditures that may lead to patents, copyrights, new processes, and new products.
A dividend is a corporation’s distribution of cash or stock to its stock holders on a pro rata (proportional) basis. Investors are very interested...
Variance is the difference between total actual costs and total standard costs. The variance is expressed in total dollars, and not on a per unit basis.
- Matching principle
This method of expense recognition is referred to as the Matching principle that companies match efforts (expenses) with accomplishments (revenues).